[T.S.R:17324] GVK Power-Should They Seek Bio-Gas?

GVK Power-Are Power Projects Being Approved Without Fuel Linkages?

 

GVK Power's 4QFY11 results were impacted by the higher fuel costs and operating overheads, resulting in lower EBITDA growth. Airports' performance was impressive, while the roads segment was steady. Airport regulations regarding: i) recovery of aero charges; and ii) real estate monetization remain key for MIAL. Our estimates and rating are under review.

4QFY11 results. Consolidated revenue fell 5.5% yoy to `4.6bn, 1.7% below our estimate, due to lower power revenue (down 7.5% yoy) to `4bn. For FY11, revenue grew 7.2% yoy to `19.1bn. EBITDA for 4Q grew 41.6% yoy to `1bn, well below estimates, due to higher fuel and opex costs in the power and road segments. Net profit grew 11.1% yoy to `368m in 4Q. Depreciation & interest expenses were lower 10% than our estimate in 4Q. Tax expenses were higher than estimate due to one-time tax payments in its power project, Jegurupadu-1 (JP-1).

 Airports impressive, Power subdued, Roads steady. Airports FY11 revenue/earnings grew 15.6%/56.3% yoy to`12.3bn/`3.3bn. Passenger and cargo traffic saw strong growth yoy. Power revenue fell 7% yoy to `4.1bn due to lower PLFs on short supply of gas. Profits were impacted by higher opex and tax payments at JP-1. Roads saw a steady performance.

n       Other project updates. Expansion of 1.6GW of gas plants (JP-3 and Gautami-2) is on hold due to no clarity on future fuel (gas) availability at the Andhra Pradesh coast. Of the `15bn private equity investments in GVK Energy, `9.4bn has been received. Order related to recovery of aero charges from AERA and approval for real estate monetization from MMRDA is awaited. 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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